Mr Chua Kheng Wee Louis (Sengkang): Singaporeans compare prices to get the best value for money for their purchases and to better manage the cost of living. According to the 2023 Household Expenditure Survey, about 16% of Singaporeans’ monthly expenditure is on food and beverage (F&B) services. Unfortunately, it is more complicated to compare prices when eating out than when making other retail purchases.
While some F&B outlets display all-inclusive prices, others do not include service charge and Goods and Services Tax (GST) in the menu price. Their inconsistency can cause frustration when the customer sees the final bill, which is almost 20% higher than the menu price. It also makes it harder for customers to compare prices across different F&B operators.
Tourism is a key driver of our services industry. I have, in the past, often heard feedback from my foreign friends about how they are shocked by the final prices of their F&B purchases and their taxi rides compared to the prices they were initially expecting.
In the era of ride hailing apps, the shock of seeing a myriad of additional charges added to the flag-down fare is now much less likely. But when it comes to F&B establishments, the sticker shock remains.
Currently, the Inland Revenue Authority of Singapore (IRAS) grants hotels and F&B outlets an administrative concession which allows them to display prices ex-GST if they also impose a service charge. This differs from other retail sectors, where the price displays must include GST. IRAS’ rationale for this concession was to help restaurants manage operational challenges when waiving service charge for takeaway orders.
I would like to ask the Minister when this concession was last reviewed and whether it is still relevant today. Given the prevalence of electronic menus, it is very straightforward for restaurants to display both dine-in and takeaway prices. Alternatively, if they use paper menus, they could simply give a 10% discount for takeaway orders instead of having 10% for dine-in orders.
Some restaurants do display all-inclusive prices, but many may be reluctant to do so for fear that they will be seen as more expensive than their competitors.
In the interest of ensuring a level playing field between F&B operators and improve consumers’ dining experience by having greater price transparency, I urge IRAS to review this concession and to require the display of all-inclusive prices as I believe the overall real benefits to the public outweigh any perceived cost to businesses.
Mr Chairman, Mr Louis Chua asked about the concession for hotel and F&B establishments that impose a service charge to display GST-exclusive prices.
This concession was granted in 1994, based on industry feedback that it would be costly and operationally challenging to maintain and display separate price lists for take-away items and dine-in items, as service charge would be imposed only on the latter. The concession is to help reduce business costs. But clarity for consumers is also important, and businesses that rely on this concession must display a prominent statement informing consumers that prices shown are subject to service charge and GST.
This practice has now been in place for three decades, and we last reviewed it again in 2022. Sir, I do not think most consumers would be confused, as Mr Chua claimed. Conversely, removing the concession may lead to more confusion and also increase costs for businesses as they would now need to print multiple sets of menus and price lists.
Ministry of Finance
28 February 2025
https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=budget-2577
Office of the Leader of the Opposition 